Does money buy happiness? What the research actually says
The famous $75,000 happiness plateau was revised in 2023. Here is what research now says about money, happiness and how to spend well.
"Money cannot buy happiness" is one of the oldest sayings there is. Research over the last fifteen years has given a more interesting answer: money is linked to happiness, the link is stronger than many people assumed, and how you feel about money and how you spend it matter as much as how much you have.
The famous $75,000 figure
In 2010, Nobel laureate Daniel Kahneman and economist Angus Deaton analysed survey data from hundreds of thousands of Americans. They found that life evaluation, how people judge their life overall, kept rising with income. But emotional wellbeing, how people felt day to day, seemed to level off at around $75,000 a year.
The finding spread widely and became shorthand for "beyond a certain point, more money does not make you happier".
The challenge, and the resolution
In 2021, psychologist Matthew Killingsworth published data from over a million moment-by-moment reports of how people felt, collected by smartphone. He found no plateau: happiness kept rising with income well above $75,000.
Rather than argue in print, Killingsworth and Kahneman did something unusual. They teamed up, with psychologist Barbara Mellers as a mediator, to work out why their results differed. Their joint paper, published in 2023, found that both were partly right (Killingsworth, Kahneman and Mellers, PNAS, 2023):
- For most people, happiness rose steadily with income, with no plateau.
- For the least happy 20 percent, happiness rose with income up to around $100,000 a year and then flattened.
The authors suggested that the remaining unhappiness in that group comes from things money cannot fix, such as heartbreak, bereavement or clinical depression.
These figures come from US data, so the exact amounts do not translate directly to other countries or costs of living. The pattern is what matters.
What this means in everyday life
Security matters more than the number
Much of money's effect on wellbeing runs through security. Knowing you can cover rent, bills and an unexpected repair reduces a constant background stress. That is why HappyUps asks people to rate how secure they feel about money, not how much they have. Two people with the same income can feel very differently about it.
Money cannot fix everything
The 2023 finding is a useful reminder. If you are deeply unhappy for reasons like grief, loneliness or depression, more income may help with practical problems but will not resolve the cause. Those need time, connection and often professional support.
How you spend matters
Research by Elizabeth Dunn, Lara Aknin and Michael Norton found that people who spent money on others reported greater happiness than those who spent the same amount on themselves (Dunn, Aknin and Norton, Science, 2008). Other studies have linked spending on experiences, and on buying back time from chores you dislike, to higher wellbeing.
Practical ways to improve your money wellbeing
- Build a small buffer first. Even a modest emergency fund can reduce day-to-day worry more than a larger long-term goal.
- Notice what money worries cost you. If your money score is low on the same days your sleep and patience suffer, that link is worth addressing.
- Spend a little on other people. A coffee for a friend or a small gift can lift your own mood as well as theirs.
- Choose experiences over things, sometimes. Shared experiences tend to keep paying back in memories and connection.
- Buy back time where you can. If a task drains you and you can afford to hand it off, the hour you gain may be worth more than the money.
The short answer
Does money buy happiness? For most people it helps, and it keeps helping as income rises. But it works best when it brings security, connection and time, and it cannot reach the parts of unhappiness that come from loss, loneliness or illness.
Tracking how secure you feel about money alongside happiness, love, energy, spirituality and health is one of the clearest ways to see how money is really affecting your life.
Frequently asked questions
Does money really buy happiness?
For most people, research shows happiness keeps rising with income. A 2023 study found the rise flattened only for the least happy 20 percent, above around $100,000 a year in US data.
Is the $75,000 happiness plateau true?
It was an influential 2010 finding, but a 2023 adversarial collaboration including one of its original authors found that most people do not hit a plateau. Only the least happy group showed a levelling off.
What kind of spending makes people happier?
Studies link spending on other people, on shared experiences and on buying back time from disliked chores to greater wellbeing than spending on things for yourself.
Why does feeling financially secure matter so much?
Money worries create constant background stress that affects sleep, mood and relationships. Feeling able to cover essentials and surprises removes much of that stress, regardless of income level.
